Further weakness in China weighed on market sentiment

Monday, February 03, 2014

China’s NBS Non-Manufacturing PMI fell to 53.4 in January, compared to 54.6 in December, holding above the crucial 50.0 area. However, the figure showed that Chinese economic growth is easing. As Chinese markets are closed for the Lunar New Year, other Asian equity markets posted heavy losses with the Nikkei Index plunging almost 300 points to end at 14619.13, down 1.98%.

European equity markets have posted modest declines in early trading ahead of the PMI manufacturing data from the Eurozone and the UK as well as ISM Manufacturing data from the US. The euro has been consolidating around 1.348 against the US dollar, looking for some direction.

This week, the main focus will turn to interest rates decisions and the monetary policy announcements from the Reserve Bank of Australia, Bank of England and the European Central Bank for any signs of policy changes. The key employment data of the US non-farm payroll will be released on Friday.

Commodities: Brent crude dropped to a two-week low at $106 per barrel as fairly weak non-manufacturing PMI data from China caused renewed concerns about a lack of oil demand from China. However, renewed worried about the uncertainty in Iraq and Syria managed to provide some support to the market, offsetting the heavy losses.

Gold was little changed in Asian trading, after posting its first loss in six weeks, as the US dollar strength weighed on prices.

 

EURUSD

EURUSD

Brent - Daily Chart 2 Years

CO1 Comdty

Events for today:

 

Chinese Market Holiday

 

0700

UK

Jan

Halifax Home prices

0855

DE

Jan

Manufacturing PMI

0900

EZ

Jan

Manufacturing PMI

0930

UK

Jan

Manufacturing PMI

1500

US

Jan

ISM Manufacturing

1500

US

Dec

Construction Spending

 

All times UK Local Time

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